NBC Stations Will Ditch Time Warner Cable Unless They See Some Cash

Cable companies compensate most of the channels they offer, sharing a portion of the money they get from subscribers with the individual stations– but apparently Time Warner Cable doesn’t share the wealth with broadcast networks — and Austin, TX NBC affiliate KXAN is having none of it. They want some money!

KXAN’s website has a lobbying section that compares TWC broadcasting their network for free to someone bottling water from a drinking fountain and selling it.

KXAN says:

Here is a basic analogy: If you were to get a drink of water at a public drinking fountain, it is free, but once the water is placed in a package, it is no longer free. The same holds true for local television programming delivered through a subscription-based provider.
…
Time Warner Cable pays cable networks, such as ESPN, TNT, Disney, Lifetime, Nickelodeon, and the list goes on and on. Cable companies often say that local broadcasters have “unreasonable demands” and they are trying to “protect their subscribers from increasing their rates”. If that were true, why are they paying cable networks that have far less viewership than KXAN-TV?

We do not believe that a penny a per day per subscriber is an unreasonable demand for our award-winning news, sports and entertainment programming. It is actually much less than what cable companies compensate many of its cable networks, most of which do not have the high viewing of your local NBC station.

The station also says that they’ve reached agreements with every other provider — including DISH network, DirecTV, and AT&T.

Time Warner Cable, on the other hand, claims that KXAN is damaging its reputation as a news outlet by “conveying one sided, misleading information to the public.” And has set up its own “Anti-KXAN” website.

Time Warner Says:

KXAN is demanding money from our customers to pay for a signal that has been and is free. That’s right. They get it free from the Federal Government, but they want you to pay. We don’t want that to happen just so KXAN can add to their revenue base.

KXAN is trying to subsidize their business by charging cable customers money. By doing so, they not only add to their revenue base, but take advantage of their viewers by charging for a signal that is FREE.

This may sound familiar to some of you, as the same struggle is going on all over the country, where other stations owned by KXAN’s parent company, LIN TV, will also be dropped from TWC on October 2nd if a deal isn’t reached.

So what’s a consumer to do? Well, you can wait it out and hope that the stations reach a deal with TWC, buy a good antenna, or you can make plans to switch. LIN-TV is encouraging TWC’s customers to switch to DISH Network — and also told Multichannel News that customers in the Buffalo area and the Fort Wayne market can switch to FiOS.

@ThatSaabGuy: I hate the service NBC gets on TWC (Dayton Here). No HD. All the other channels are in HD. But yet NBC really had the only shows that I really need to see in HD. But right now I don’t have the Time Warner and I have my $10 directional antenna I got from amazon that gets me lots of channels. I got my NBC in hd. And it looks better than TW could ever bring me. (Same is true for the channels they have in HD)But I’m getting UVerse soon. time warner can suck it.

$50 to switch? Sure. Just don’t forget to add $6 a month for 7 local channel pack. No wonder they advocate Dish — they’d get way more than a penny.
I hope Time Warner will pick up an NBC affiliate from Temple instead. That’d be great!

@mzs: I need the financial news because I trade stocks. The over the air broadcast stuff sucks big time on timely news. All you get is Maury reruns, soaps, and Judge Judy all afternoon. It’s a wasteland of shows on regular TV during the mornings and afternoons.

Consider about 80% of Americans get their local channels from either cable or satellite, I’d call their bluff. Let’s see how demanding the affiliate broadcasters are when their audience drops about 40% or more.

@Roclawzi: Doesn’t matter. The TWC office out here is trying to do it with our Fox station. The problem being they can bluster all they want, but if they don’t pay up they lose Sunday Packer games and are f*cked.

Greed on both sides, but even more so from the cable companies. The only thing here is that Fox carries the Packer games locally and can actually blackmail the f*ckers back. Most broadcast stations can’t even consider it.

Wow, it’s amazing the most basic bits of knowledge you take for granted that others are blissfully ignorant about. Maybe it’s because I used to be a transmitter engineer for a PBS station that I know this. Or maybe it’s because I read the news every day. But, here I go.

@GMFish: You can save your links, I just didn’t believe that it there were that many people still getting the old aerial signal. I know of one person that uses it, and that’s it, out of hundreds of people. But then again, I’m in New Jersey, so it could be entirely different elsewhere.

KXAN is stating they are asking for less then $0.01 per subscriber. If that is true then they are only asking for $3.11 per month out of timewarner’s pocket to cover everyone in the Austin area. That has to be far less then all the TV, Radio and internet ads both companies are fighting over. So it is really more about time warner not wanting to open up the doors to paying for any local channels and not just about this particular market.

Consequently if every time warner customer in Austin signed up for Dish they would be paying out $15,550,000 in rebates!

@strife1012: Yeah, they had the same issue with SuddenLink in Georgetown TX (20 miles north of Austin). After a couple of months or so, KXAN was back, but they did run the Waco NBC station’s feed. It’s not just LIN vs. TWC, it seems like they’re going after every cable company, and apparently satellite, too, since they’re plugging the deals they have in place with Dish and AT&T Uverse. I have seen mentions of Grande (another locally based cable co.), and the other day, KXAN ran a 90 second Grande spot. Think they got a deal on that ad buy?

@palookapalooza: Yeah. I have to take TWC’s side on this, because this isn’t the first time it’s happened, and I bet it’s not the last. I’m just curious how every single other affiliate hasn’t had this problem and LIN has multiple times.

I’ve been around long enough to remember a little bit of history about this. Thirty years ago, cable companies were trying to find a “value” to justify someone paying for their service when they could get TV for free with an antenna. The only way cable could sell their services was to become a replacement, rather than an augment, of the then current television offering. In order to be a replacement, they had to offer local programming in its entirety. (I was one of the early adopters who subscribed to cable just for movie channels). Now it seems Cable, Inc. feels the tables have turned, and they can offer cable without local channels.

Well good luck to them. Hope they’re keeping their eyes on the economy, ’cause I see it possibly going the other way (subscribers moving back to broadcast.)

@humphrmi: I remember that, too. It was also supposed to be “commercial free” because it was “pay tv.” You were paying for it so they wouldn’t have to run commercials to make money. Now, it seems that most of cable is commercials/infomercials. So much for that plan…

I live in Austin, TX and I see the KXAN ads they are very straight forward. Unlike Time Warner -vs- Satellite ads that are VERY skewed.

In either case, I switched to Dish Network the second I bought at house. Better service, better picture quality, and a MUCH better DVR. Also they are no longer charging $5 a month for local channels. And their DVR receives the local antenna High-Def feed and the Standard-Def satellite feed and can record seamlessly between them.

@LoveNoelG: Are you a new TWC customer? I just ask, because as a longtime TWC-NYC customer, I would NEVER sign any kind of contract with them, price lock or not. I want to be able to get rid of them and their crappy service/customer service easily. (My only choice right now is TW or broadcast.) I’m also extremely suspicious of any of their “offers” since my TW experience over the last ten years has been uniformly bad. Their service goes out way more often than my DISH-TV ever did, even in thunderstormy North Texas. It takes forever to get an appointment, and they ALWAYS show up very, very late or not at all. They are reluctant to let you do any set-up on your own, even if it’s something as simple as plugging in a box. They raise your rates constantly without offering more service. Their HD offerings in my market are terrible. Their DVR boxes have extremely limited features.

@GirlCat: Am in a PLG myself here and I remember them saying you have 60 days to cancel. If you drop before them you are ok. Also I have the Price Lock thing to keep my rates low. I save an extra 15-20$ a month for the next two years and when the ones that complain bout a contract and the price ill be able to keep my low price 2 years from now when I relock and and am saving 50$ a month. :)

@LoveNoelG: I live in Austin now too and have been seeing all the back and forth on this thing. You may not be in the coverage area, but if you are, I’d strongly suggest going with UVerse. We have it and Loooooooooove it. We see the little ticker across the bottom of KXAN and are happy that we aren’t in that boat. It isn’t an advertisement, just another option if it’s available…

At least reduce your term to 12 months. Read the terms and conditions. You have 60-days to change.
The price lock is a automatically renewing contract, at the higher rate at the end of your term of service.

What I did was listed all my options on a spreadsheet, between Time Warner, Dish and Direct TV.
I listed my favorite channels and noted what packages they were included on, and what company worked out to be the best value. In the end we are paying $15 less per month then time warner for many more REAL channels.
I pay a grand total of $80 a month for Dish 200, HD DVR and Locals and taxes.

I still have road runner as DSL in my area isn’t up to par, but if you keep road runner don’t let time warner force you into keeping “Basic cable” to keep your internet at the same price, it simply isn’t true.

This keep happening in Buffalo.
First, Time Warner REFUSED to carry the local FOX in HD
Then, they threatened to get rid of NBC
Now, they are saying they will drop CBS, during football season?!? They have some nerve at Time Warner. I am paying them to simply give me cable TV, and they have issues every single frekin year with the local channels.

I used to work for in local affiliate TV land (I made those terrible local car commercials and tractor store commercials you have to endure) and can say, without a doubt, local broadcasters are some of the lowest paying, behind the times and hyperbole swallowing businesses out there.

Most companies that own groups of locals are biting it hard with the tanking economy and are giving away the store to make up lost revenue and…. well… they dug their own grave, now they can die in it.

LIN held up HD carriage agreements with DirecTV for over 18 months trying to squeeze out a few extra dollars. They’re also running ads on WIVB that are just telling people to dump TWC and go to Dish Network.

It’s a flawed industry to be sure. I’d say both sides should take equal blame on this one.

@GMFish: The Abilene, TX, NBC affiliate tried the same stunt a couple of years ago. Same dueling ads and op-eds; in the end, the station got pulled for a few months and then there was some face-saving “compromise” that, AFAIK, was status quo ante bellum.

I work for a small, local independent television station in a decently large market. I can tell you firsthand how badly the local stations get jerked around by cable companies and how screwed up the entire situation has become. It’s really, really bad, and a lot of local stations are going to be dead in the water come February. >.

OMG I am in austin and don’t know what I am going to do. I was going to switch to uverse but they say that the signal is too far from my house so at the moment I can’t I don’t want a dish. They better resolve this, I want my 30 rock!

Here’s how I feel about it… the local broadcasters are getting a superior quality feed nearly for free, by getting it added to cable. They’re making money off the advertising on their channels.

So, cable companies shouldn’t have to pay them a bloody dime. If the local broadcasters don’t like it, they can take their product off the cable system and hope they get -anyone- to still watch, via rabbit ears.

IMO LINTV needs to learn what the word “negotiate” means. You don’t get a good price from someone by trashing their company publicly, and advertising that their customers should stop using their service.

TW has a point. Anything I can get from LINTV I can get free on the internet. With a little knowhow you can connect your computer to your TV, and still get the same programming.

Besides, aren’t there commercials every 5 minutes on these channels for a reason? I always thought that was how they made their money, not some underrated version of HBO.

This is still happening in St. Louis with Charter Communications in regards to HD feeds. For years there was a dispute between Charter and the ABC affiliate over compensation so ABC HD was not shown on Charter. Charter finally caved in to their demands, only to see the CBS affiliate pull its HD feed from Charter, wanting money.

I don’t have Charter anymore but from what I understand the CBS HD feed still isn’t shown here (the affiliate advertises it’s news in HD is available OTA and on satellite.) Yes we have 2 local news shows in HD (NBC affiliate was first then the CBS affiliate.)

The key here is that the signal’s economic value is basically zero (it’s free to anybody with an antenna). Of course it’s not REALLY zero, but it’s zero after the advertisers pay for it.

The economic value of having cable provide local signals is that I don’t have to stick an antenna up on my roof. Whether this is worth a penny a month or a buck a month is irrelevant to KXAN – because it’s Time Warner that’s providing that service of convenience to me – KXAN is doing nothing for it.

Not just NBC pulling this trick, the San Antonio ABC affiliate (KSAT) is doing the same thing. It’s been mildly amusing to watch the dueling propaganda sites the companies have put up. In the blue corner, we have KSAT’s site, KSAT Community, and in the blue corner is Time Warner, with The Truth Hurts KSAT. I have to wonder who KSAT paid to put that page together, though; if you base your comparison on pure web presentation, I think TWC wins hands down.

@dantsea: Sort of, but the stations hold the cards. Here’s the current deal on that:

Over the air stations in the local market of a cable system can get on a cable system in two ways:

1. Seeking “must carry” status. In this case, the station asserts its right to be carried on a cable system and the system puts it in, without any money changing hands. Usually the station gets the right to ask for a preferred channel, such as the same as their own over the air channel number, in exchange for the cable system not having to pay.

2. Seeking “retransmission consent” status. In this case, the station withholds its right to be carried on the cable system unless the cable system pays for the privilege. The station negotiates the cost of carriage with the cable system owner, and also usually where it will land on the channel lineup.

In both cases the station controls its status on a cable system and a choice between the two has to be made by the station every three years, according to current FCC regulations. Apparently LIN TV is going the “retransmission consent” avenue for its stations.

@dantsea: You’re referring to the “Must Carry” rules. And, not exactly. A local station can require the cable company to carry it, but if it does so, the station can’t dictate additional terms. What’s happening here is that carrying the NBC affiliate has some value to the cable company, and the affiliate is trying to capture some of that value.

Must carry was intended for situations where the cable company didn’t really get any extra value — like with your local UHF religious broadcaster that maybe 5 people watch.

I wonder how LIN TV will feel when their advertisers are requesting cable advertising rates, or when their viewers insist on fewer commercials since they now direct pay for the award winning lotto number drawings.

Here is a basic analogy: If you were to get a drink of water at a public drinking fountain, it is free, but once the water is placed in a package, it is no longer free. The same holds true for local television programming delivered through a subscription-based provider.

This is a ridiculous analogy. That is EXACTLY what bottling companies do. They take tap water and put it in a bottle and sell it. There’s a reason why Dasani doesn’t sell well in Philadelphia (it being bottled in the ghetto of ghettos in North Philly).

I am making the switch back to antenna. Free off the air television is better. Why pay for it now when digital off the air is better quality than cable/satellite? Consider that when Crapcast, TWC and the satellites offer HD, it’s really faux HD (compressed so much, it looks like SD). Yep. The business model is changing guys (he he!) I will not pay for 500 channels of infomercials and local T.V. when it’s free over the air. The rest I can get on the Internet (for now). ROTFLMAO!

@vastrightwing:
You’d have to have pretty poor eyesight to think compressed HD looks anything close to SD. Perhaps you saw some SD content broadcast on an HD channel and thought compression was the culprit.

@mugsywwiii: On the other hand you’d have to have pretty poor eyesight to not notice the difference between OTA HD DTV and HD cable. I had comcast, their HD box, an antenna, and an HDTV with a built-in ATSC/QAM and OTA/cable tuners. I also had a PIP mode that put two sources side by side, squished horizontally or cropped+squished as needed. When comparing analog SD cable through the box or with the TVs built-in cable tuner to the analog OTA, the quality was identical. But when comparing the HD OTA to the HD channel through the cable box, there was a very clear difference. The cable HD was much more blocky and with much less detail. Action in sports that was clear in HD OTA was a blocky mess in HD cable. Also the I-Frames were much more noticeable (about every second) in the HD cable than on HD ATSC. And as a final kick in the pants many programs that had 5.1 sound OTA were down sampled to stereo in the HD cable broadcast.

I find it hard to believe anyone can defend the cable company! They charge outrageous monthly fees for which I get scores of channels that I don’t want; I pay their blood-sucking fees so I can have a half dozen channels that I *really* want. My local cable company dropped a la carte pricing years ago, and my monthly bill doubled. I can get 4 HD channels over the air, which is great, but I can’t get the ‘extra’ ones that I want without going through cable or one of the satellite dish companies.

Long live Senator Sanders! from the proud citizens of the People’s Republic of Vermont.

@CatMoran: In all honesty, I think the cable companies need to be re-regulated, and forced to provide a-la-carte pricing; this is precisely what Senator Sanders is in favor of. Why should I as a consumer be required to pay for dozens of channels I never watch?!

@majortom1029: A la carte pricing WOULD be cheaper. If I want, say, 6 a la carte channels, at 30 cents per month each, that’s two bucks per month. Right now, I pay an additional 30 bucks each month for the package of extra channels. Now, you tell me, which is cheaper?

When we had a la carte pricing, the cable company dropped it, saying most people didn’t opt for it. That’s just BS – they dropped it because they weren’t making enough money off of us smart consumers.

We are having this problem over here with our local channel 4 station. The notice comes with an ad to switch to direct TV if you want to continue to watch the station (and get 50$ off) after October 12th or something.

Lol this is funny. The Lin TV affiliate is having to upgrade their services to DTV … and having to shell out the money. Coincidence?

Im sure they are asking for money to break even on this. Also Lin TV was shady about this. Running the tv adds and info in the paper saying TWC is dropping them they are playng the press to bully twc into their demands.

@intellivised: Check out some of the commercials on the first digital tier from Comcast and I’m betting it’s the same for all the cable companies.

Billy Mays (fifty times a day at least, wang stretchers, get it up pills, acne medicines complete with closeups of somebody’s worst zits, weight loss pills, send us your old gold, legal tender Liberian silver or gold plated whatnots, “Chef” Tony and his wonder knife set… all delivered at volume levels at least twice that of the programming itself… almost makes me long for the days when all I had to put up with were “local car commercials and tractor store commercials”.

I guess you could say that if KXAN gets what they are asking for, all the networks will follow suit and on all the various delivery mediums (satellite, UVerse, etc.) so eventually it’ll be an extra charge for each local broadcast station. With Austin’s five broadcast stations and maybe even PBS it would be nearly $2 per month for local broadcasts. Doesn’t seem like much but annoying if we had to pay it.

So nobody is going to point out that you can bottle water from a public drinking fountain (or even basically get the government to pay to you build a bottling plant which will receive public water for free)?

I used to work for a TV affiliate here in the Austin area. Here’s the two points I’ve been making with my friends when they keep asking about it:

1. TWC pays to carry cable networks, and receives insertions (ad time) to sell to offset that payment. Unless something major has changed since I left the biz, they are not receiving any insertions on any of the broadcast (local) stations. This means they ain’t making any money carrying the local stations, at least not directly. So the chances of them being willing to pay directly a local affiliate (and then ALL of the local affiliates as their contracts come up) are pretty slim IMHO.

2. I haven’t seen anything like this announced so far, but when the local UPN went out of business TWC added the San Antonio affiliate. I doubt they will have a hard time finding another Texas-based NBC affiliate who wouldn’t mind picking up some ratings in Austin as a bonus.

Finally, if TWC gives in I have no doubt my bill will go up 30 cents per affiliate plus tax and fees and whatever else they decide to tack on. Gee, thanks.

I’m pretty sure humphrmi has this right – but I actually think it is a law. Can someone weigh in on this. I believe cable HAS to carry the local broadcast affiliates, and I would assume that some money is exchanged. For TWC to say wha the broadcasters are getting is free is stupid when comparing it to their channels being re-routed on cable. The cable network isn’t free, only the airwaves. How many people, if they get cable or some other pay-for-tv option, are going to also have an antenna for the 5 or 6 local broadcast stations? That’s the local affiliates concern.

@ELC: There was a post about this earlier in a reply. The Affiliate has two choices.

A must carry. Which is no charge but forces TWC to carry them. Or the other where they demand money but TWC has the option to decline and not carry them. Costing the Affiliate lots of viewers and the advertisers will be more than willing to drop them costing Lin TV money to.

The same thing happened here in Iowa. About a month before the Superbowl, the corp that owned the local Fox affiliate told Mediacom that they had to pay millions to keep their station.

It got bad. Mediacom said no, and they passed out free rabbit ears so that people could still see the big game. I think eventually, they negotiated a lower price, but by then many Mediacom viewers had switched to DirectTv or SatTv.

The funny thing was, the increase that this company was asking for was more than the monthly payment from Mediacom for all ESPN stations.

As a resident of Buffalo, an affected market, I have a few thoughts. First, one of the two LIN stations is our CBS affiliate, the top-rated news and primetime station. The other is our CW affiliate. That means no CSI or Top Model, which is pretty much every demographic that’s watching TV these days. Second, LIN is constantly running “Switch to Dish” banners on TV, which is creating a major sense of distrust in the community. It’s super shifty when a local affiliate runs ads offering $50 off on a competitor to how you’re currently receiving their signal. Third, and most importantly, a majority of people in Buffalo would NEVER switch to DISH, DirecTV, or FIOS simply because they’d loose the Toronto broadcasts of CBC, CTV and the ability to watch Hockey Night in Canada. Seriously.

I am in Round Rock and noticed the KXAN message about Time Warner last week while watching Heroes and then again while watching The Office. These shows and Friday Night Lights are the only reason I ever turn to this station. With these shows available on nbc.com and hulu.com there is little concern on my part whether I can get to them via Time Warner.

Where my concern came in is with how much I am paying Time Warner to the tune on $185/month for TV/Phone/Internet.

AT&T sent me a flier that U-Verse was now available in my area and had an introductory offer of $90/month for the same services. I visited the AT&T store in San Antonio this weekend to check U-Verse out and signed up.

I ended walking out with everything I had at TW plus a discount on my cell bill (AT&T Wireless) and free AT&T Wifi for $125/month (regular price – not introductory) and a $200 rebate. The rebate will take care of my early termination fee with TW if I have one.

I think TW is dumb to get in dispute with a local station like this and is really dumb that they want to jack up the prices for their limited service with AT&T coming into town.

Wait a second. By being broadcasted by the cable companies, their viewership goes up. If they were not carried by cable, what do you think the chances of someone mounting rabbit ears are right now, and then having to flip inputs between antenna and cable?

By having a larger number of viewers, you are able to generate more advertising revenue.

This happened between the local CBS affiliate here in Orlando and BrightHouse Networks. It came down to the wire and the local affiliate finally caved. 78% of the viewers were on cable and all the advertisers threatened to bail on them if their viewership took a hit that large.

@pinkyracer: Meg got the headline of this story wrong. This isn’t an issue between TWC and NBC, it’s between TWC and LIN TV owned stations. The one cited in the OP happens to be an NBC station, but a lot of the LIN stations involved in this are not and belong to other networks.

Say what you want about NBC and their coverage of an event, they are not the ones instigating this problem. LIN TV is.

I kind of think that they’re both right, but I’m going to side with TWC on this one. You can always get NBC for free; just unplug your cable and get an antenna. You can’t get ESPN, CNN, etc. for free, so that’s why TWC pays those networks for their content.
I also agree with other comments that the local NBC station gets mad money from the surplus views of their advertising. TWC might turn this around and say that they should pay THEM to get into their package and get that extra advertising.
Finally, my personal beliefs tend to sway with the ‘fuck TV’ crowd. Why pay for something when like 90% of the shows are available for free online? And I’m not talking about BitTorrent. The networks themselves usually put them up on their websites shortly after they go on the air. Hulu.com has most of them, including Daily Show, Colbert Report, Simpsons, The Office, and other, much crappier, unwatchable shows that many Americans enjoy for some reason or another. The only reason I can even think of having cable is to get something like Fox College Sports network. In fact, the only time I ever have cable is from the beginning of the college basketball season to the time that my team gets eliminated from the tournament. And that’s the only thing I use it for. If I could get the games online, even paying for it, I would much rather have that option (Arizona has a website that allows you to get radio feeds and SOME video).
Quite simply, why are you paying for internet AND cable TV? Your computer IS a TV these days!

Local affiliates have distinct regional zones. If they can cover that area, no other affiliate can. I ran into this wall during the early days of DirecTV. The local stations firmly believed their signal was sufficient at my location and denied DirecTV the ability to transmit one of their other signals to me. If KXAN doesn’t allow its signal to be broadcast on TWC, no other NBC channel can be.

This is also happening in Indianapolis with Brighthouse networks and the CBS affiliate WISHtv and its 2 sister stations. WISH carries all the Colts games, so I imagine, there’s going to be a whole lot of unhappy people when they yank the broadcast on Thursday.

Most of the NBC programs are available online for free. Even though you can see 30 Rock, SNL, and any number of broadcast programs completely free of charge over an antenna, LIN TV wants to charge for them. During the past year or so, Hulu.com and other broadcast sites (NBC, FOX, etc.) have started streaming most of their most popular shows online. Total cost: free dollars and free cents.

Charging for something that’s increasingly available for free in other outlets is Bizarro-world economics.

We’re negotiating with LIN TV right now — and using their TV stations to scare and misinform the public is definitely a negotiation tactic. It’s not free like TV online — but it is really cheap.

I say forget cable entirely. If you want tv.. use a digital converter box or an digital/hdtv. If you really want additional channels get Directv or Dish network. I have had cable and Directv for years. I have to say that Directv’s picture quality is much much beter then any cable provider. I’m sure Dish network is about the same.

What happened to MUST carry laws? If they can receive the channel over the air.. the cable company MUST carry it. If that’s the case.. then why SHOULD the cable company have to pay for something they are FORCED to carry.??